US 30-Year Mortgage Rates Surge to 6.67%, Highest in Over a Year Amid Conflict

Mortgage rates spike across US and Europe due to conflict-driven inflation fears. US 30-year fixed rates hit 6.67%, straining housing markets and suppressing transaction volumes.

Woofun AI reports that the average interest rate for 30-year fixed mortgages in the U.S. climbed to 6.67% this week, marking the highest level in more than a year. This figure exceeds the 6.43% recorded at the beginning of July and the 5.98% level prior to the outbreak of the Iran-U.S. war. The recent rise in 10-year U.S. Treasury bond yields is cited as a primary driver of these higher mortgage rates. Consequently, the average monthly mortgage payment for standard homes in the U.S. has risen by nearly $150 since the start of the year.

In Europe, the average interest rate for 5-year fixed mortgages in the UK reached 5.66% in July, representing the first month-on-month increase since April. In Germany, the 10-year fixed mortgage interest rate increased from 3.3% at the beginning of July to 3.7% this week, while in France it rose from 3.02% in June to 3.15% in July. Market analysts attribute these trends to the U.S.-Iran conflict, which has elevated oil and energy prices, intensified inflation concerns, and pushed up financing costs such as U.S. Treasury bond yields and UK swap rates. These high rates continue to suppress real estate transactions, with the 'low-interest-rate lock-in effect' persisting in the U.S. and UK housing sales agreements declining by nearly 10% year-on-year in July.